Pepsi: choice of new Indian generation?

April 8, 1987

By Gary YerkeySpecial to The Christian Science Monitor

New Delhi

A decade ago India gave Coca-Cola the boot. Now it's PepsiCo's turn to try its luck. This spring, the Indian government is expected to approve a multimillion-dollar plan to bottle and sell Pepsi in the country despite opposition from domestic soft-drink producers who fear foreign competition and politicians who feel Pepsi's presence will exacerbate political tensions.

The debate over whether to allow Pepsi to penetrate the world's second most populous nation has been heightened by the American company's decision to set up operations in the troubled state of Punjab, where terrorist-related violence has claimed 700 lives in the past 18 months.

Some Indian analysts trace the violence in Punjab, which is linked to Sikh separatist demands, back to the '60s when American scientists helped launch Punjab's Green Revolution. This, they argue, led to high unemployment. ``Sons of Green Revolution farmers soon joined the ranks of the unemployed who first took to political extremism, then to terrorism,'' says columnist Rajni Kothari.

Critics have recalled alleged American ``meddling'' in other parts of the world to bolster their argument. During a recent debate, opposition MP Dipen Ghosh called Punjab ``a hotbed of foreign conspiratorial activities.'' He asked whether, ``against the background of the Latin American experience, where US multinational corporations played havoc,'' it would be ``politically opportune'' to allow an American firm to operate in ``an area like Punjab.''

Company officials dismiss such views, and say the $17-million project will benefit India's economy by expanding the soft-drink market. Indian officials say the project is likely to be approved because: Pepsi's equity share will be under 50 percent (Coke owned 100 percent); and Pepsi plans to make huge investments in agriculture research and the developing food-processing industry.

The project is ``the essential catalyst for [India's] next agricultural revolution,'' the Times of India wrote recently.

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